The very point of sale: Solving checkout, retail's last mile (The Green Sheet)

The big trend: Payments that make checkout invisible. 

The big trend: Payments that make checkout invisible. 

By Dale S. Laszig
DSL Direct LLC

In his book How We Are, psychologist and author Vincent Deary examines how habitual behaviors like walking and talking eventually become like apps running in the background of our lives. As an example, Deary noted that on a routine trip to the grocer, he pays little attention to his footsteps or the movement of items from store shelves to his shopping cart. But when he enters the "crucible of the checkout," he begins the "attention-heavy" part of his shopping journey.

"There was the self-consciousness of standing there with a queue behind me, of taking up people's time and of figuring in their awareness," he wrote. "And then there was the attention to the actual task at hand: the counting out of change, trying to get the sum right, interacting with the checkout boy. This was the only truly deliberate part of the whole buying-milk-at-the-shops affair, deliberate in the sense of deliberated, thought out."

Checkout's fiery forge

No customers should be afraid to enter a checkout lane, nor should they feel dumb or intimidated when they do. Cory Capoccia, President of Womply, a software-as-a-service company, said a growing number of retailers are addressing this issue by replacing legacy POS systems with intuitive, cloud-based solutions.

"Technology has tremendous power to either accelerate or cripple businesses, depending on how it is implemented," Capoccia said. "In years past, technology required purchasing boxed software, manual installation through expensive third party consulting engagements, implementing clunky hardware systems, and plenty of additional and often unpleasant steps."

Winston Fong, Chief Strategy Officer at global technology company Castles Technology Co. Ltd., said, "People change their habits all the time. As device manufacturers, we want to get ahead of that and not make people feel dumb. By observing customer behavior, we find ways to enhance our display screens to make people want to come back and repeat the experience."

Make checkout invisible

Capoccia said market leaders Uber, Lyft and Amazon Go stores are placing payment mechanisms behind the scenes to make checkout invisible to their customers. These examples illustrate how rapidly technology can change and how mass adoption of cloud-based technologies is transforming the checkout experience for business owners of all locations, types, and sizes, he noted.

"If you are anything like me, the few times you find yourself taking a traditional taxi, your muscle memory causes you to begin to exit the taxi before you realize that you still need to pull out a credit card and pay," he added. "As we continue this trajectory, we will soon be able to walk in and out of stores and complete our purchases without having to think about it."

Capoccia has observed that while payments' biggest technology breakthroughs are intentionally subtle for the everyday consumer, creating a simple, easy experience has been neither simple nor easy for technology companies and service providers, which have nevertheless delivered impressive results. "We're seeing more and more user experiences emerge where the payments mechanism operates behind the scenes and becomes more or less invisible to the end consumer," he said.

Make checkout simple, even fun

The following examples demonstrate clear purpose and clean execution in action and show how companies can:

  • Enable business discovery via online directories such as Yelp, Facebook, and TripAdvisor
  • Streamline commerce via well-designed in-app or one-click purchasing flows like Amazon's, which encourages consumer purchases by removing hassles and streamlining the buying experience
  • Simplify banking via remote mobile check deposit.

These winning strategies have helped the end user achieve their objective while saving time and freeing them to focus energy in other personal or professional areas of their lives.

"Technologies that miss the mark do so because of complexity or ambiguity in their core offering," Capoccia said. "Some examples include commerce enabled by clunky QR code scanning; card-linked reward programs that lack a broad acceptance base; most customer acquisition or advertising solutions, which are too complex for the everyday business owner to master to ensure a positive return on their investment; and legacy point-of-sale solutions that are overly complex and costly to implement and use on an ongoing basis for busy business owners."

Retailers need to solve problems, delight customers and differentiate, but that's not always how POS solutions are sold, Fong said. OEMs and service providers must help ISOs do more in the markets they serve, by providing tangible, innovative solutions that bridge the gap between the retail and payments worlds. Gamification at the POS is trending in retail. The 2015 CRM/Unified Commerce Survey by Boston Retail Partners reported that 87 percent of retailers will implement gaming to support strategic initiatives such as customer rewards, program enrollments and new product promotions.

"The ISO model is hard because there's a lot of push," said Brian Brunk, Principal at Boston Retail. "Using widgets and pricing and brochures to differentiate yourselves is not sustainable."

Deliver a consistent experience

Omnichannel commerce ideally delivers a consistent experience across physical and virtual media, from in-app to in-store to online, and even from one retailer to another. Mom-and-pop merchants can provide customers with the same connected commerce experience they'd get from a major retail brand by using multiple channels to reward customers' loyalty; text offers; promptly answering online reviews; and providing secure, single-click checkout options.

Capoccia said cloud-based technologies have democratized the retail landscape, expanding the capabilities and reach of small and midsize business (SMB) owners and empowering them to win back market share from big-box retailers. "SMBs have always been well positioned to differentiate on stellar customer experience and small, nimble teams, and the relatively recent emergence of a robust technology suite for small businesses will enhance and amplify these advantages," he said.

The job of delivering a consistent commerce experience to merchants belongs to merchant level salespeople. Having spent time with retail and hospitality customers, they are familiar with day-to-day challenges confronting business owners. They know merchants want to create a friendly and welcoming presence at the POS, in the store, on the website, inside the app and all over social media. Checkout may just be a small part of the equation, but it's an important one: it represents the last mile of the journey, where buying decisions are forged.

Dale S. Laszig, Senior Staff Writer at The Green Sheet and Managing Director at DSL Direct LLC, is a payments industry journalist and content provider. She can be reached at dale@dsldirectllc.com and on Twitter at @DSLdirect.